Performance audit, Governor's Council on Development Disabilities

DOUGLAS R. NORTON. CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
LINDA J. BLESSING, CPA
DEPLJiY AUDITOR GENERAL
February 3, 1988
Members of the Arizona Legislature
The Honorable Evan M echam, Governor
Mr. Randall L. Gray, Chairperson
Governor's Council on Developmental Disabilities
Transmitted herewith is a report of the Auditor General, a Performance Audit
of the Governor's Council on Developmental Disabilities. This report is in
response to a March 3, 1987, resolution of the Joint Legislative Oversight
Committee.
The report addresses the Council's performance in planning and advocating
services for Arizona's developmentally disabled citizens. The Council has
successfully identified the needs of developmentally disabled Arizonans and
developed a series of State plans to address these needs, but has had difficulty
implementing some aspects of its plans. The Council also needs to improve its
process for procuring contractors to implement projects so that the process is
consistent with the State procurement code.
My staff and I will be pleased to discuss or clarify items in the report.
Respectfully submitted,
~ o& g! as R. Norton
Auditor General
CC: Mr. Jon C. Hinz, Executive Director
Members of the Governor's Council
on Developmental Disabilities
Staff: William Thomson
Mark Fleming
Cindy Whitaker
Michael Friedman
2700 NORTH CENTRAL AVE. 8 SUITE 700 8 PHOENIX, ARIZONA 85004 8 ( 602) 255- 4385
SUMMARY
The Office of the Auditor General has conducted a performance audit of the
Governor's Council on Developmental Disabilities ( GCDD) in response to a March 3,
1987, resolution of the Joint Legislative Oversight Committee. This performance
audit was conducted as part of the Sunset Review set forth i n Arizona Revised
Statutes 5541 - 2351 through 41 - 2379.
The purpose of the GCDD is to plan and advocate on behalf of the State's
developmentally disabled citizens to assist them in reaching their maximum
potential. The Council does this by monitoring current services, identifying unmet
needs and gaps in services, and developing plans to address these needs. In addition,
the Council funds various projects based on identified needs.
GCDD Needs To Be More Effective
In Implementing Its State Plan ( see pages 11 through 15)
The Council has successfully identified the needs of Arizona's developmentally
disabled and developed a series of State Plans to address these needs. Furthermore,
the Council has successfully carried out some important projects. For example, one
recent project increased the number of developmentally disabled adults finding jobs
from four to 92. In addition, Council legislative advocacy efforts have resulted in
important contributions to the State's developmentally disabled population.
Despite its successes, the Council has had difficulty implementing some aspects of
its State Plans. The GCDD has identified transportation as an important issue for
the developmentally disabled since at least 1981, yet has sponsored only one minor
transportation related project in recent years. In addition, the Council has been
unable to hold an important workshop suggested by a Council task force nearly two
years ago. The Council has also poorly managed two significant projects addressing
other needs. One project funded a model program, the results of which were to
support a future funding request for treating the developmentally disabled/ mentally
ill. The Council spent approximately $ 250,000 over a two year period for this
project. However, the Council received the project's results 19 months behind
schedule and has indicated the quality of the final report is inadequate evidence of
the program's results. A second poorly managed project involved the six district
advisory councils. Although G C D D spends approximately half of its project dollars
to fund district councils each year, it has failed to regularly monitor district
councils' contract compliance.
To improve implementation of its State Plan, the GCDD should review its progress
in achieving stated goals and determine necessary actions to improve performance
or revise goals. Additionally, the Council should routinely monitor contractor
activity and take steps to resolve identified problems in a timely manner.
The GCDD Needs To Improve
Project Procurement ( see pages 17 through 20)
The Council needs to improve project procurement in two ways. First, the GCDD
should begin the contracting process earlier to ensure that funds are used in a timely
manner. During fiscal year 1987, slow Council action to identify and fund projects
resulted in over $ 92,200 of project funds remaining unused for most of the year.
Furthermore, the Council reverted approximately $ 37,400 of this amount during a
last minute attempt to obligate some of the remaining funds.
Secondly, the Council should strengthen its procurement procedures to improve
competition and ensure compliance with the State's Procurement Code. In the past,
the Council's method of soliciting and funding projects may have limited
competition. Current G C D D procurement guidelines are vague and limit the
Council's ability to effectively solicit innovative projects. According to
Department of Administration Purchasing and Department of Economic Security
contracting officials, the Council has two alternatives that would meet its project
identification and procurement needs and comply with Code provisions. The G C D D
should ensure that all future actions are consistent with the Procurement Code.
TABLE OF CONTENTS
Page
INTRODUCTION AND BACKGROUND . . . . . . . . . . . . . . . . . . . 1
SUNSETFACTORS . . . . . . . . . . . . . . . . . . . . . . . . . 7
FINDING I: THE GOVERNOR'S COUNCIL ON DEVELOPMENTAL
D I S A B I L I T I E S NEEDS TO BE MORE EFFECTIVE IN
IMPLEMENTING ITS STATE PLAN . . . . . . . . . . . . . . . 11
GCDD Has A c c o m p l i s h e d Some
I m p o r t a n t G o a l s . . . . . . . . . . . . . . . . . . . . . 11
I m p l e m e n t a t i o n I n Some Areas . . . . . . . . . . . . . . . 12
Has Been Weak
Recommendations . . . . . . . . . . . . . . . . . . . . . 15
FINDING I I : THE GOVERNOR'S COUNCIL ON DEVELOPMENTAL
D I S A B I L I T I E S NEEDS TO IMPROVE PROJECT PROCUREMENT. . . . . 17
C o u n c i l P r o c u r e m e n t P r a c t i c e s Are Slow . . . . . . . . . . 17
GCDD Needs To Ensure G r e a t e r C o m p e t i t i o n For
P r o j e c t P r o c u r e m e n t . . . . . . . . . . . . . . . . . . . 19
Recommendations . . . . . . . . . . . . . . . . . . . . . 20
AGENCY RESPONSE . . . . . . . . . . . . . . . . . . . . . . . . . 21
Page
LIST OF TABLES
TABLE 1 GOVERNOR'S COUNCIL ON DEVELOPMENTAL
D I S A B I L I T I E S EXPENDITURE DETAIL FEDERAL
FISCAL YEARS 1985- 86 THROUGH 1987- 88 . . . . . . . . 4
INTRODUCTION AND BACKGROUND
The Office of the Auditor General has conducted a performance audit of the
Governor's Council on Developmental Disabilities ( GCDD) in response to a March 3,
1987, resolution of the Joint Legislative Oversight Committee. This performance
audit was conducted as part of the Sunset Review set forth in Arizona Revised
Statutes ( A. R. S.) 9941- 2351 through 41 - 2379.
Role O f The Council
The Council is comprised of up to 23 members appointed by the Governor. By law,
the members must represent persons with developmental disabilities, parents and
guardians of persons with developmental disabilities, and representatives from State
agencies delivering services to the developmentally disabled. The Council was
established in 1978 under executive order as the Arizona Developmental Disabilities
Planning and Advocacy Council, and statutorily established in 1983 as the Governor's
Council on Developmental Disabilities. Federal law requires that Arizona create
such a Council in order to receive Federal funding under the Developmental
Disabilities Act of 1984.
The purpose of the Council is to coordinate, plan and monitor services for
developmentally disabled individuals. In addition, the Council advocates for these
individuals to assist them in reaching their maximum potential. The Council does this
by identifying unmet needs and gaps in service that face the developmentally disabled
population. To address these needs, the GCDD is required by statute to develop and
submit for approval an annual State Plan to the Federal Department of Health and
Human Services.
Extent Of Developmental Disability In Arizona
According to the Council's three year' 1987- 89 State Plan, it was estimated there
were more than 60,000 people in 1987 with developmental disabilities in Arizona.
Generally, persons unable to function in certain life areas identified in statute are
considered developmentally disabled. Specifically, the Council's statute defines
developmental disability as a severe, chronic disability of a person that:
a is attributable to mental or physical impairment such as mental retardation,
cerebral palsy, epilepsy or autism.
a is manifested before age 18.
0 is likely to continue indefinitely.
a results in substantial functional limitations in three or more of the following
l i f e areas: self- care, receptive and expressive language, learning, mobility,
self- direction, capacity for independent living, and economic self- sufficiency.
a reflects the need for a combination and sequence of special services which are
of lifelong or extended duration.
Not a l l developmentally disabled individuals receive services or treatment through
private and public agencies. According to a Department of Economic Security ( DES)
official, resources are directed generally towards infants and individuals with the
most severe functional limitations. For example, DES was funding services for
approximately 5,200 developmentally disabied persons as of June 30, 1987.
0 rganization
The Council is organized into four standing committees. The Executive committee
oversees the budget and allocates project funds. The Planning Committee
coordinates Council e f f o r t s w i t h other State agencies and evaluates the feasibility of
proposed projects. The Human Rights and Systems Committee addresses statewide
issues to improve service delivery and ensure the protection of the legal and human
rights of developmentally disabled persons. Activities of the Legislative Committee
include proposing, reviewing and monitoring legislative issues affecting
developmentally disabled people.
Currently, there are 22 Council members. In addition, five full- time staff support
Council activities. Staff include an executive director, planner, program and project
specialist, administrative secretary, - and clerk typist. In addition, the GCDD
periodically employs a part- time intern.
Federal law requires the Council be placed under the auspices of an administering
agency to assist the Council and its staff with administrative functions.
The Council's administering agency is the Department of Economic Security. In this
capacity, DES provides the Council with administrative services such as accounting,
contracting, and personnel services. For these services, DES may receive up to 5
percent of the Council's total yearly allotment or $ 50,000, whichever is less.
Budget
The GCDD is entirely Federally funded under the Developmental Disability Act of
1984. Although the Council receives no State funding, other State agencies co- fund
some Council projects. Federal statute specifies certain G C D D expenditure
allocations. At least 65 percent of Council funds are to be allocated to develop and
fund projects, while no more than 35 percent can go toward administrative and
planning activities. The Council operates on a Federal fiscal year ( October 1 through
September 30). Table 1 ( see page 4) shows Council expenditure detail for fiscal years
1985- 86 through 1987- 88.
Audit Scope And Purpose
Our audit of the GCDD focused on the Council's effectiveness in developing and
implementing the State Plan and the adequacy of the contracting process. The audit
concentrated on the Council's success in attaining several important State Plan
goals. In addition, our audit included a review of the Council's contracting process
used to meet its State Plan goals. The audit report presents findings and
recommendations in two areas.
( I The adequacy of the GCDD's execution of the State Plan.
0 The adequacy of the G CDD's contracting process.
We also present information addressing the 12 factors that the Legislature should
consider in determining whether the Governor's Council on Developmental
Disabilities should be continued or terminated.
TABLE 1
GOVERNOR'S COUNCIL
ON DEVELOPMENTAL DISABILITIES
EXPENDITURE DETAIL
FEDERAL FISCAL YEARS 1985- 86 THROUGH 1987- 88
( Unaud i ted)
Personal Services
Employee Related
Professional and
Outside Services
Travel
Equ i pmen t
DES - A d m i n i s t r a t i o n
Other Operating
Actual Actual Budgeted
FY 1985- 86 FY 1986- 87 FY 1987- 88
TOTAL
( a) DES reduced the amount of i t s a d m i n i s t r a t i v e charge f o r f i s c a l year 1986 because of
Council overexpenditures i n some budget categories.
( b) Although p r o j e c t s expenditures does not equal a t l e a s t 65 percent of y e a r l y
expenditures, some s t a f f costs are a l l o c a t e d t o p r o j e c t s . These include s t a f f costs
f o r c o n t r a c t and p r o j e c t development.
( c ) The t o t a l authorized amount of Federal funds was $ 624,189, however, $ 37,412 of p r o j e c t
funds was reverted t o the Federal government.
Source: Prepared by Auditor General s t a f f based on f i s c a l years 1985- 86
through 1987- 88 expenditure information provided by DES.
This audit was performed in accordance with generally accepted governmental
auditing standards.
The Auditor General and staff express appreciation to the Chairman, council
members, Executive Director and s t a f f o f the Governor's Council on Developmental
Disabilities for their cooperation and assistance during the audit.
SUNSET FACTORS
In accordance with Arizona Revised Statutes ( A . R. S.) 341- 2354, the Legislature
should consider the following 12 factors in determining whether the Governor's
Council on Developmental Disabilities ( GCDD) should be continued or terminated.
1. The objective and purpose in establish- i ng the Governor's Council - o. n
Developmental Disabilities
GCDD is Arizona's advocacy and planning body for persons with developmental
disabilities. GCDD's statute states that the purpose of the Council is " to
ensure that persons with developmental disabilities receive the care necessary
for them to reach their maximum potential." The Council meets this
responsibility in the following ways.
0 Identifying unmet needs for the provision of services for the
developmentally disabled through public input.
0 Developing a State Plan that establishes and prioritizes goals for addressing
those issues or problems.
0 Funding projects to meet those goals.
In addition, A. R. S. 341- 2454 directs the Council to serve as a statewide forum
for issues concerning the developmentally disabled, advise private and public
officials on current programs and policies, review service plans of agencies,
monitor services to the developmentally disabled population, and facilitate a
statewide community information network among the six district advisory
councils.
2. The effectiveness with which the GCDD has met its objective and purpose and
the efficiency with which it has operated
The Council has been generally effective in meeting some of its primary
responsibilities. GCDD has developed State Plans as required by law. In
addition, some GCDD members and staff and other parties indicated that the
Council's legislative advocacy work has produced some significant results in
addressing the needs of developmentally disabled children and adults.
Furthermore, some Council projects appear to have been successful. For
instance, projects assisting developmentally disabled adults in finding
employment and supporting siblings of developmentally disabled children have
demonst rated achievements.
However, the Council can increase its effectiveness in two ways. First, i t
needs to strengthen the implementation of the State Plan by reviewing progress
toward accomplishing goals and more carefully managing individual projects
( see Finding I, Page 11). Second, the Council needs to improve its procurement
process to ensure that it is able to contract for projects in a timely manner ( see
Finding II, page 17).
3. The extent to which the GCDD has operated within the public interest
The Council has operated within the public interest by:
m incorporating public input in developing a State Plan.
m funding projects to address unmet needs of developmentally disabled
individuals.
m showing significant involvement in legislative advocacy.
4. The extent to which rules and regulations promulgated by the GCDD are
consistent with the legislative mandate
According to the Attorney General's Office, the GCDD does not have the
authority to promulgate rules and regulations.
5. The extent to which the G C D D has encouraged input from the public before
promulgating its rules and regulations and the extent to which it has informed
the public as to its actions and their expected impact on the public
Since the GCDD does not have the authority to promulgate rules and
regulations, this factor does not apply.
6. The extent to which the GC DD has been able to investigate and resolve
complaints that are within its jurisdiction
The G C D D's enabling legislation does not establish a formal complaint review
process.
7. The extent to which the Attorney General or any other applicable agency of
State government has the authority to prosecute actions under its enabling
legislation
The G CDD's enabling legislation does not establish such authority.
8. The extent to which the GCDD has addressed deficiencies in its enabling
statutes which prevent it from fulfilling its statutory mandate
The Council's Federal mandate defines developmental disability more broadly
than its State statute. The Council was originally established by an Executive
Order which specified developmental disabilities to include autism, cerebral
palsy, epilepsy and mental retardation. However, when the Council helped
draft i t s enabling statute, SB 1139, its efforts resulted in a revised, broader
definition of developmental disabilities. According to the Council, this allowed
i t to advocate for individuals more in line with the Federal definition.
In 1986, the Council requested introduction of SB 1086 which increased Council
membership from 17 to no more than 23 in order to comply with changes in
Federal law requiring additional agency representation.
9. The extent to which changes are necessary in the laws of the GCDD to
adequately comply with the factors listed in the sunset law
Based on our audit work, no statutory changes are recommended.
10. The extent to which the termination of the GCDD would significantly harm
the public health, safety or welfare
Termination of the GCDD would not significantly harm the health, safety or
welfare of the State's developmentally disabled population. However, if the
G C D D were terminated, Arizona's developmentally disabled citizens would lose
a valuable resource. Although the GCDD does not provide continuous
direct- care services for the developmentally disabled, i t does serve as a
statewide advocate and funds projects to identify and meet the needs of the
developmentally disabled community. In addition, Arizona must have a Council
to receive its allotted share of Federal funds which will, according to Council
estimates, amount to approximately $ 650,000 for fiscal year 1988.
11. The extent to which the level of regulation exercised by the GCDD is
appropriate and whether less or more stringent levels of regulation would be
appropriate
The G C D D is not a regulatory agency, therefore, this factor does not apply.
12. The extent to which the GCDD has used private contractors in the
performance of i t s duties and how the effective use of private contractors
could be accomplished
The Council routinely hires private contractors. The Council has funded
annually, since at least fiscal year 1984, the six nonprofit district advisory
councils. In addition, the Center for Law in the Public Interest for the same
period received funding to provide increased public information and legal
advocacy services to the developmentally disabled. Periodically, the Council
also funds other private contractors for a variety of services. However, the
Council has experienced some contract management problems. To improve the
effective use of contractors, the Council should more closely monitor
contractor performance and assert authority when necessary, ( see Finding 1,
page 11).
FINDING I
THE GOVERNOR'S COUNCIL ON DEVELOPMENTAL DISABILITIES
NEEDS TO BE MORE EFFECTIVE IN IMPLEMENTING ITS STATE PLAN
The Governor's Council on Developmental Disabilities ( GC D D) could improve its
ability to implement its State Plan for meeting the needs of Arizona's
developmentally disabled citizens. The Council has successfully developed a State
Plan that meets Federal requirements and carried out some successful projects.
However, the State Plan's implementation has been weak in some areas.
GCDD Has Accomplished
Some Important Goals
GCDD has met several of its responsibilities. The Council has developed plans that
assist in meeting the needs of the developmentally disabled. Some projects appear
successful in accomplishing established goals.
State Plan - GCDD has developed a series of State Plans that identify issues
facing Arizona's developmentally disabled citizens. The Council has prepared
several three year State Plans since 1981. The three year State Plan can be
updated to allow for flexibility to meet changing needs or issues. Each Plan has
been approved by the U. S. Department of Health and Human Services.
Presently, the Council is implementing its 1987- 89 State Plan. The present State
Plan addresses a wide array of issues for improving services to developmentally
disabled people. These issues include transportation, housing, employment,
deinstitutionalization and parental rights.
State Plan issues are addressed through the identification, prioritization and funding
of projects for the developmentally disabled. The Council identifies State Plan
issues by holding public hearings, working with agencies serving the developmentally
disabled, and soliciting input from advocacy groups concerned with the needs of the
developmentally disabled. The Council has spent approximately $ 1.3 million dollars
since fiscal year 1983- 84 on projects for the developmentally disabled in Arizona.
Successful projects - The Council has carried out some important projects
designed to improve services for the developmentally disabled. For example, the
GCDD helped the Department of Economic Security fund a project to train and find
employment for severely disabled adults who were considered unemployable. This
project increased the number of developmentally disabled adults finding jobs from
four to 92, and the approach used in this project has been used in similar projects
throughout Arizona. The Council also funded a program to provide support for the
sisters and brothers of developmentally disabled children. The initial program
results were positive, prompting the Council to fund the expansion of the program in
1988.
In addition to funding projects, the Council has supported legislation affecting the
developmentally disabled. Several individuals interviewed during the audit cited the
Council's legislative advocacy as making important contributions to the
developmentally disabled population. The Legislative Consortium, chaired by a
G C D D representative, successfully supported legislation on preschool funding for
developmentally disabled children and parking for the handicapped. The consortium
also issued legislative alerts through the Council during the legislative session to
inform interested parties about issues that affect the developmentally disabled
community coming before the legislature.
Implementation in Some Areas
Has Been Weak
In contrast to its accomplishments, the Council has had difficulty implementing
some aspects of its State Plan. Little substantive action has been taken in the
trailsportation area, despite its importance. In addition, the Council has not
properly managed several major projects.
Limited action on transportation - Although transportation for developmentally
disabled individuals has been recognized as an important issue for several years,
GCDD has taken l i t t l e action to address the issue. According to the Council's own
analysis, transportation is important to developmentally disabled individuals
because it provides access to medical, educational and other services. The G CDD
identified several transportation barriers from a 1981 study while a 1982 series of
workshops provided many action recommendations for addressing transportation
problems.
The Council elected to study the issue again and convened a Transportation Task
Force in January 1985. The final task force report, issued in March 1986,
recommended the Council hold a workshop with service providers, service users and
legislators. However, the Council changed the site and date of the workshop several
times. The workshop is now scheduled for April 1988.
The lack of substantive action on transportation for the developmentally disabled
illustrates the Council's indecisiveness in dealing with a recognized problem.
Transportation has been recognized as an important issue since at least 1981, yet
few resources have been allocated to it. Since fiscal year 1984, the GCDD has
funded one transportation project at a cost of $ 3,000. This amount represents about
1 percent of annual project funds. Thus, GCDD has accomplished l i t t l e on a major
problem facing Arizona's developmentally disabled citizens. ( 1 )
Poor project management - Two projects representing significant Council action
and substantial funding have been poorly managed. GCDD's project to gain
designated funding for treatment of developmentally disabledlmentally ill
individuals was extremely late and did not meet the Council's expectations. In
addition, GCDD did not regularly review the activities of district advisory councils
( D A C) to ensure their contract compliance.
The Council failed to conclude an important project for treating a special population
of developmentally disabled people. Although the G C D D spent nearly $ 250,000 on
this project, it did not obtain expected results. The results from this project were
to be used to support an agency's request for designated funding for treating people
who are developmentally disabled with mental health problems.
This project blended the staff and financial resources of the GCDD with the
Department of Economic Security ( DES) Division of Developmental Disabilities and
the Department of Health Services. The project was designed to provide
therapeutic residential and day programs for up to 18 developmentally disabled
persons with mental health problems. ( 2)
( 1 ) Some a c t i o n has been taken on t r a n s p o r t a t i o n by the l o c a l d i s t r i c t advisory
councils. Two d i s t r i c t c o u n c i l s reported a c t i v i t i e s on t r a n s p o r t a t i o n issues i n
t h e i r 1987 annual reports to the GCDD.
( 2) The developmental 1 y d i s a b l e d person w i t h mental i l l n e s s has t r a d i t i o n a l l y been an
i n d i v i d u a l whose needs were not addressed because of the u n c e r t a i n t y about whether
the person i s p r i m a r i 1 y developmental 1 y d i s a b l e d or mental1 y ill .
GCDD experienced problems throughout the project. The Council was not a
signatory to the initial project contract and, therefore, lacked control over its
payments to the contractor. (" After recognizing this oversight, the Council
obtained signatory authority. The Council identified problems shortly after the
project began but was unable to correct them. For instance, inconsistencies in
vendor claims and attendance records noted at the project's outset remained as it
was completed. During one program site review, the Council had concerns about the
welfare of one client but did not report the concern to DES or demand an immediate
response from the contractor. Furthermore, the final report on client success rates
was 19 months late. Some council members and staff stated that the training
materials and final report are inadequate. As a result, this project has not been
used for its intended purpose.
The Council did not appear to know how to manage the contract to gain
compliance. Although the Council had concerns about the contractor's performance
at several points throughout the contract period, i t was unable to specifically
identify its expectations to the contractor. In addition, the GCDD did not attempt
to use a common technique of withholding payments to ensure compliance. Thus,
the GCDD did not exercise accepted contact management techniques to ensure that
the project's intended purpose was accomplished. Recently, the GCDD executive
director met with the contractor in an attempt to obtain the desired output.
GCDD has also failed to adequately monitor the performance of the six district
advisory councils. Over the past three years, the GCDD has allocated
approximately half of its project funds for the DACs. This amounted to $ 174,000
during fiscal year 1986- 87. These district councils assist the GCDD by providing
local input and information on issues affecting the developmentally disabled.
Despite their importance, prior to August 1986 the GCDD had not conducted regular
DAC site reviews for several years. In addition, site reviews conducted by the
Council between August 1986 and April 1987 found problem areas in the DAC's
delivery of contracted services. Some examples of these problems are an
unorganized legislative alert system, weak networking relationships, and no public
awareness meetings. The Council also identified documentation problems.
( ' 1 DES and the GCDD j o i n t l y funded t h i s p r o j e c t . The contract began b e f o r e t h e GCDD
signed t h e c o n t r a c t because DES had signed and i n i t i a t e d the c o n t r a c t .
Furthermore, the Council did not adequately address the identified problems in new
DAC contracts. According to GCDD staff and meeting minutes, DAC contracts for
fiscal year 1987- 88 were to include DAC action plans for correcting deficiencies
noted during site reviews. However, our review found that this did not occur.
According to some D A Cs, the G C D D wrote unclear site review reports and was slow
in returning some reports. These problems may have delayed the DACs returning
corrective action plans to the Council. The Council received only two DAC
corrective action plans prior to fiscal year- end. In addition, our review indicated
that Council staff did not adequately incorporate the corrective action plan
information into the fiscal year 1988 contracts. Consequently, similar D A C
performance problems may continue because contracts do not adequately reflect
promised corrective action.
RECOMMENDATIONS
1. The Council should review its progress in achieving the goals identified each
year in its State Plan. I f the review indicates limited or no progress, the
Council should: 1) determine what actions are necessary to improve
performance in attaining the goal and act upon what was determined, or 2)
revise the State Plan to change the goal.
2. The Council should improve project management by: 1) routinely monitoring
contractor activity to ensure that i t complies with the contract, and 2) bringing
problems identified during the review to the attention of the contractors and
resolving them in a timely manner. In cases where problems are not resolved to
the Council's satisfaction, it should take necessary steps, including withholding
payments, until problems are resolved.
FINDING II
THE GOVERNOR'S COUNCIL ON DEVELOPMENTAL DISABILITIES
NEEDS TO IMPROVE PROJECT PROCUREMENT
The current procurement practices of the Governor's Council on Developmental
Disabilities ( GCDD) may not ensure the most productive use of project funds. Late
project identification and contracting may reduce the Council's capability to meet
its goals. Furthermore, weak procurement practices may compromise fair and open
competition.
Each year, the Council contracts ( under the auspices of the Department of
Economic Security) with individuals, organizations and State agencies for specific
projects or activities to identify and f u l f i l l needs of the developmentally disabled.
This process is a major role of the Council. Federal law mandates that the GCDD
spend the majority of its yearly appropriation on project development and
implementation. For fiscal years 1984 through 1987, the Council averaged 15
project related contracts and agreements each year, and spent approximately $ 1.3
million on projects during the four year period.
Council Procurement
Practices Are Slow
Late contracting and project identification may reduce the Council's effectiveness
in meeting its goals. During fiscal year 1987, approximately $ 92,200 of GCDD
project money remained unused for nearly the entire year. This ultimately resulted
in the reversion of $ 37,400 of the funds, and last minute expenditures of $ 11,450 on
numerous small projects and conferences. The GCDD should revise the project
procurement process to ensure that funds are used in a timely manner.
The GCDD was slow to identify and fund projects during fiscal year 1987. More
than $ 92,200 of 1987 project money, approximately 24 percent, was available but
remained unused by the GCDD for nearly the entire fiscal year ( ' I Excluding
projects the Council regularly funds each year, such as district advisory councils,
this amount accounted for nearly 57 percent of uncommitted project funds. ( 2)
) The GCDD operates on the Federal f i s c a l year - October 1 t o September 30.
( * ) A1 though considerable l a t e p r o j e c t i d e n t i f i c a t i o n and funding occurred during f i s c a l
year 1987, it also occurred during 1986 t o a l e s s e r extent.
Council and Department of Economic Security records show that although
approximately $ 54,800 of the $ 92,200 was eventually used, because the Council was
late to act it lost approximately $ 37,400 of fiscal year 1987 funds. According to a
Federal officia!, state councils must formally obligate project money within the
year i t is appropriated by the Federal government. Unobligated funds are reverted,
or returned, to the Federal government. On September 29, 1987, Council staff
submitted an agreement to be signed by DES regarding a joint GCDDIDES project.
The Council's intention was that remaining project money would be obligated by this
signed agreement. However, DES did not sign the document, questioning the need
for such an agreement. Consequently, because the Council waited until virtually the
last day of the fiscal year to obligate remaining project funds, there was no time to
resolve the problem and, therefore, the money reverted.
Furthermore, the Council's attempts to identify and fund projects near the end of
the year may result in less effective use of the Council's limited resources. For
example, the GCDD spent $ 11,450 on eight small dollar projects and conferences
during the last month of the fiscal year. Although each concerned the
developmentally disabled and some were considered by the Council for several
months, funding numerous small projects may not be the most effective use of the
Council's limited funds. Some Council members themselves have indicated
displeasure over this type of spending.
The Council should revise its project procurement process to ensure that funds are
used in a timely manner. The Council should begin planning and procuring for
projects much earlier than in recent years, so project contracts can be started as
early as possible, preferably within the first few months of the fiscal year.
Approximately six months prior to each fiscal year, the Federal government
provides an estimate of the revenue the GCDD can expect to receive during the
following fiscal year. Actual revenue has exceeded the estimate in recent years.
Thus, the Council could use this information to budget and start developing
contracts before the new year starts.
GCDD Needs To Ensure Greater Competition For
Project Procurement
The Council's past practice of soliciting and funding concept papers may not have
fully complied with Arizona's procurement requirements. Although the
Procurement Code is designed to maximize competition, some Council procedures
may unnecessarily limit competition. The GCDD could meet its needs for
innovative projects by complying with the Code.
The Arizona Procurement Code ( Arizona Revised Statutes $ 341- 2501 through 2652)
is designed to provide for fair and open competition. The Code establishes
purchasing methods and procedures designed to foster maximum feasible
competition.
Soliciting and funding concept papers, a method used by the Council through 1986 to
identify innovative projects, may limit competition in two ways. First, soliciting
concept papers through local district advisory council ( DAC) newsletters and by
word- of- mouth, for example, may be construed as a request for proposals ( RFP).
This process may not meet Procurement Code public notice requirements, which
generally require advertising the RFP at least twice in a general circulation
newspaper with at least 65,000 subscribers. Secondly, the Council has, on occasion,
issued an RFP based on a concept paper. This process can also limit competition
because there may be a tendency to develop an RFP so specific to the original
concept that only the submitter of the concept could adequately respond.
Although the Council no longer solicits concept papers, current procedures are
vague and could be strengthened to allow the Council to continue to identify
innovative projects while complying with Procurement Code requirements for public
advertising. The Code provides several options. One method is the RFP process in
which initial proposals and " best and final offers" are solicited; the other is a
two- step RFP method. According to a DES Contracts Management Section manager
and the State Purchasing Office, both methods could be used by the Council.
Under the first method, the Council would develop and advertise a general RFP, as
required by the Code, requesting technical offers ( similar to concept papers) and an
estimated total project cost. ( " The Council could also send an RFP to any
persons or organizations i t is aware of that may be interested in receiving an RFP,
such as the DACs. The Council would then review the proposals received and
identify those projects of greatest interest to the Council. Discussions could be held
with potentially acceptable proposers to clarify G C D D intent and further define the
potential project and costs involved. For those deemed potentially acceptable, the
Council would solicit and evaluate " best and final offerstt containing more project
detail and specific budget information.
The second method, a two- step R FP process, also allows for flexibility in identifying
creative projects. Under this method, the G C D D could request interested parties to
submit project ideas, through a variety of means, such as DAC newsletters.
However, the request must clearly indicate that: 1) it is not a request for proposals,
and 2) respondents may be placed on bidders lists to be used when the GCDD issues
future RFPs. The Council would evaluate project ideas received and develop two
bidders lists. The first list would consist of projects the Council is most interested
in, the second would contain projects of lesser interest to the Council. The Council
would then develop and advertise a general RFP. The RFP would be sent to any
party requesting it, based on the advertisement, and also to all persons or
organizations on the first bidders list. The Council would complete the process by
conducting discussions, and evaluating all proposals received.
RECOMMENDATIONS
1. The G C DD should develop procurement procedures to ensure that contracts are
negotiated so projects can start at the beginning of each fiscal year.
2. The Council should revise and follow policies and procedures to improve
competition by ensuring adherence with the Procurement Code for project
procurement. To assist in developing these guidelines and to ensure that G C D D
needs are met, Council staff should consult with representatives of the DES
Contracts Management Section and the State Purchasing Office.
( ' I A " general RFP" would contain d e s c r i p t i v e information about GCDD goals, o b j e c t i v e s
and broad areas of i n t e r e s t .
1 7 1 7 W JEFFERSON
SITE CODE 0742
P 0 BOX 6123
PVOENIX. ARIZONA 85005
16021 255.4049
Governor's Council
on
Developmental Disabilities
EVAN MECHAM
Governor
RANDALL L. GRAY
Chairperson
JON C. HlNZ
Executive Director
January 28, 1988
Mr. Douglas R. Norton
Auditor General
State of Arizona
2700 N. Central Ave.
Suite 700
Phoenix, AZ 85004
Dear Mr. Norton:
The Governor's Council on Developmental Disabilities ( GCDD)
has reviewed the draft report of the performance audit and
appreciates the opportunity to add clarification to several
points raised in the audit.
FINDING I: THE GOVERNOR'S COUNCIL ON DEVELOPMENTAL
- D ISABILITIES NEEDS TO BE MORE EFFECTIVE IN IMPLEMENTING ITS
STATE PLAN
Transportatio- n
The proposed workshop to address rural transportation
problems has been scheduled, with a date, site and federal
participation committed. It should be also noted that
individually the District Advisory Councils ( DACs), funded
by the GCDD, have addressed this issue with measures of
success based on the needs of people with disabilities in
their respective areas. The broad geographics of Arizona
have made it extremely difficult to resolve transportation
problems as a single state issue. The GCDD will encourage
the DACs to address problems of transportation on a district
by district basis. The Council will also support other
agencies better equipped to handle transportation on a local
basis.
- P- roject management
The Joint Project with GCDD,- DES- DDD and DHS to fund a model
program for persons with a dual diagnosis presented many
difficulties for the GCDD. Documents show a clear
reluctance by the GCDD to take steps to withhold funds as
A Member of the National Association of Developmental Disabilities Councils
" An Equal Opportunity Agency"
Page 2
recommended by the Auditor General. The Council is not
clear it had that option in a cooperative contract with the
Administering Agency. Clarification is being sought for
future contracts. The GCDD is also continuing to work with
the contracted provider to secure the referenced materials
in a more usable form.
As stated by the audit team, th9 Council had taken steps to
improve monitoring of the six DACs prior to the beginning of
the audit. A yearly program of on- site reviews has been
implemented. The format is still under review and the audit
team recommendations will be incorporated into the
monitoring process.
FINDING 11: THE GOVERNOR'S COUNCIL ON DEVELOPMENTAL
DISABILITIES NEEDS TO IMPROVE PROJECT PROCUREMENT
The GCDD has taken steps to identify funding priorities much
earlier in the planning cycle. Funding priorities for FY- 88
were established at the September Planning Retreat and two
KFP's were prepared by November, 1987.
As to the reversion of $ 37,400, while the GCDD did not
submit the final agreement to DES until September 29, 1987,
this was a joint project with DES- DDD and discussions were
held several months prior allowing for a timely obligation
of the funds. The GCDD notified DES the document needed to
be signed and had no reason to believe they would question
the need for such an agreement. GCDD has met with current
administration and steps have been taken to avoid future
difficulties. In addition, the Federal Government has
responded to this recognized national problem by allowing
two years to commit funds to projects instead of one as
referenced in the audit report. This is effective October
1, 1987.
The GCDD is appreciative of the audit team's efforts to aid
the Council in establishing procedures of procurement more
in line with GCDD objectives. Federal criteria mandates
" new and inovative programs" and at the same time the GCDD
must meet the requirements of the State Procurement Code.
The audit team's recommendations will be adopted.
SUMMAR- Y: The Governor's Council on Developmental
Disabilities was very pleased with the extra effort the
audit team put forth to understand the complexities of our
programs. Being entirely Federal funded, the Council must
respond to all Federal reporting and mandated program
requirements. In addition, the Council must adhere to all
Page 3
policies of its Administering Agency. Public Law 100- 146
Developmental Disabilities Act of 1987, effective October 1,
1987, addresses several of the items mentioned by the audit
team and a copy of ADD- PI- 88- 2, BSG- New Requirements is
attached to show required changes in our program that must
be made to meet established 1990 deadlines. Of special note
to the Legislature and Executive Office are:
Page 2, Item 1) This will require Executive action prior
to June 30, 1988 and possible Legislative action prior to
1990 determining the status of the GCDD relating to an
administering agency.
Page 6, Item 11) This provision may require a change in
the alloted number of members permitted to serve on the GCDD
from its current cap of 23. This may be necessary to retain
the provision of at least 50% representation of consumers on
the GCDD as required by Statute.
The balance of changes focus on the implementation of
programs to better assess the effectiveness of current
services as well as to provide input for better utilization
of resources to serve people with developmental
disabilities.
Arizona is recognized as a leader in implementing innovative
programs to persons with developmental disabilities, while
at the same time committing the least amount of resources to
develop those same programs. The GCDD has worked closely
with all agencies providing services, responding to consumer
input, and many of the innovative programs now in place
began as pilot projects worked on or funded by the GCDD.
Strong philosophical differences still exist as to the best
way to provide optimum opportunity to individuals with
developmental disabilities. No argument exists, however,
that they deserve every opportunity to achieve their maximum
potential and that all society benefits when they attain a
level of independence.
Members of the Governor's Council on Developmental
Disabilities again wish to thank the Auditor General's
Office for the help they provided in aiding the Council to
play a stronger role in seeking that goal.
A
Sincerely,
Randall L. Gray
Chairperson pxecutive Director
hds human
development
services
-
TO: Directors, State Administering Agencies
Directors, State Planning Councils
1 1 6.
SUBJECT : New Requirement3 for State Participation in
the Basic State Grant Program for Planninu
U. S. DEPARTMENT. OF HEALTH AND HUMAN SERVICES
Administration on Developmental Disabilities
r
7.
and Services for Persons with ~ e v e l o ~ m e n t a i
isa abilities - FY 1988 Instruction and RECEIVED
1. Log NO~ ADD- PI- 88- 2
PROGRAM INSTRUCTION
Allotments to States.
2. I S S U ~ D~ ateC: 1~/ 5 / 8 3
LEGAL AND
3. Originating Office: $ f m t g i f ~ ~ rito n on Developmental
sa L e s
4. Key w O f da: eBn~ ts~ - ~ eRweq uire 5. p S L . 100- 1& 6
1 *
RELATED Public Law 100- 146 Developmental Disabilities
REFERENCES: Act of 1987
45 CFR Part 1386, dated March 27, 1984.
CONTENT: Public Law 100- 146 was signed on October 29,
1987. Among the new requirements were provisions
that require immediate State attention.
This instruction provides guidance to States on
compliance with the additional requirements
imposed on States by Sections 107,122 and 124 of
the Act. This interim guidance is being provided
in order to minimize any disruption in the Basic
State Grant Program, and the requirements set
forth in this instruction are in addition to all
other requirements of Public Law 100- 146.
INSTRUCTION: States are advised that all requirements referred
to in this guidance are in effect as of October 1,
1987. No later than March 15, 1988, each State
must submit to the appropriate Regional Office
documentation that it will implement the
requirements listed below in this Fiscal Year ( FY
1988). Third and fourth quarter formula grant
awards will not be issued to any State which has
not submitted the documentation in the form of
amendments by March 15, 1988, to the currently
approved Three Year State Plan. The requirements
to be addressed rn these amendments are numbers
4 , 5 , 6 , 7 , and 11 of thrs issuance.
The remainder of t ? e requirenents must be
addressed tnrough elt!'! er amendaents to the Three
Year s t a t e Plan far Fiscal Year 1989, the new
three year State plan for Fiscal Years 1990
through 1992, Or ot! ier appropriate action by the
s t a t e a s noted i n t h i s program i n s t r u c t i o n .
~ d d i t i o n a lg uidance r e l a t i v e to these requirements
w i l l be issued by ADD in the future.
T?, ese new requirements are:
Governor
Requirement t h a t the Governor of the State determine before
Jane 30, 1988 i f he w i l l excerise h i s d i s c r e t i o n to r e t a l n
i n t3e State Plan, the designation of a State Agency that
provides or pays for services for persons w i t h
developmental d i s a b i l i t i e s as the designated State agency
to adminsster the Developmental D i s a b i l i t i e s Basic State
Grant Program. T h i s determination can be made by the
Governor of the State only a f t e r he has considered the
comments of the general public and the non- State agency
members of the State Planning Council w i t h respect to the
continued designation of suc5 agency, and a f t e r the
Governor has made an independent assessment of the impact
t h a t tke designation of such agency h a s on the a b i l i t y of
the State Planning Council to serve as an advocate for
persons w i t h developmental d i s a b i l i t i e s .
I f the Governor decides not to r e t a i n a service providing
agency as the S t a t e administering agency for the
developmental d i s a b i l i t i e s program, no action w i t h regard
t o a new designation is required u n t i l the Three Year State
plan for Fiscal Years 1990- 1993 is submitted to the
Administration on Developmental D i s a b i l i t i e s .
T3is State plan must then include the new designation of an
agency within t h e State which may be: the State Planning
Council, i f such Council may be designated a State agency
under t h e laws of the State: a State agency t h a t does not
provide or pay for services made available to persons w i t h
developmental d i s a b i l i t i e s : or a State o f f i c e , including
t3e immediate o f f i c e of the Governor of the State or a
S t a t e Planning Office. ( Sections 122 ( b) ( 1) ( B ) and
122 ( el ( 1)
State Planning Council and Governor
Requirement that by January 1, 1990, each State Planning
Council prepare and transmit to the Governor of each State
and the legislature of the State a final written report
concerning the reviews and analysis required under numbers
6 and 7 of this policy issuance. The Governor is required
to submit a copy of this report to the Secretary of the
Department of Health and Human Services no later than
January 15, 1990. This report must contain recommendations
by the State Planning Council concerning:
o the most appropriate agency or agencies of the State to
be designated as responsible for the provision and
coordination of services for persons with developmental
disabilities who are traditionally underserved, such as
persons with developmental disabilities attributable to
physical impairment, persons with developmental
disabilities attributable to dual mental impairments,
and persons with developmental disabilities attributable
to a combination of physical and mental impairments, and
such other subpopulations of persons with developmental
disabilities ( including minorities) as the State
Planning Council may identify: and
o the steps to be taken to include the data and
recommendations obtained through the conduct of the
reviews and analyses under requirements 6 and 7 of this
policy issuance in the State Planning Council's ongoing
advocacy, public policy, and model service demonstration
activities. ( Section 122 ( f) ( 4))
State Administering Agency and State Planning Council
3 ) Requirement that the State plan provide for the review and
revision, not less often than once evesy three years, of
the comprehensive Statewide plan to ensure the existence of
appropriate planning, financial support and coordination,
and to otherwise appropriately address, on a Statewide and
comprehensive basis, urgent needs in the State for the
provision. of services for persons with developmental
disabilities and the families of such persons. Such review
and revision, and examination of the provision and the need
for the provision in the State of the four Federal priority
areas and the State priority area shall take into account
the reviews and analysis conducted in accord with 6 and 7
in this policy issuance ahd the report required under 2 in
this policy issuance and include at a minimum:
( a ) an analysis of sac> priority arex in relatlon ~ 3
limited support or lack of support for persons wlt5
developmental disabilities attributable to either physical
inpaicment, mental im? alrment, Or a combination of physical
and nental impalrnents:
( b) an analysis of criteria for eligibility for services,
including specialized services and special adaptation of
generic services provided by agencies within the State,
t h a t nay be causing persons with developmental disablllties
to be excluded from recelvlng such services:
( c) an analysis of services, assistive technology, or
knowledge which may be unavailable to assist persons with
developmental disaailities:
an analysis of existing and projected fiscal resources :
( e) an analysis of any other issues identified by the State
Plannlng Council: and
( f) the formulation of objectives in both policy reform and
service demonstration to address the issues described in
clauses ( a) through ( e) for all subpopulations of persons
with developmental disabilities which may be identified by
the State Planning Council.
This requirement applies to the FY 1990- 1992 Three Year
State Plans. ( Section 122 ( b) ( 5 ) )
4 ) Zeq~ irement that the description in the State Plan of the
extent and scope of services provided or to be funded to
persons w i t h developmental disabilities under other State
plans or federally assisted State programs in which persons
with developmental disabilities are eligible to participate
include programs relating to job training, aging, programs
for children with special health care needs and housing,
comprehensive health and mental health and such other ,2lans
as the Secretary may specify. ( Section 122 ( b) ( 2)( c) ( ~) j
5 ) Requirement that, the State plan describe a process and
tinretable for the completion by January 1, 1990, by the
State Planning Council in the State, of the reviews,
a ~ ~ l y s e sa, nd final report described in requirements 6- 9
below. ( Section 122 ( b) ( 3) )
State Planning council
6 ) Requirement that each State Planning Council conduct a
comprehensive review and analysis of the eligibility ( of
persons with developmental disabilities) for services provided,
and the extent, scope, and efffectivness of the services
provided and the functions performed by, all State agencies
( including agencies which provide public asistance) which
affect, or which potentially affect the ability of persons with
developmental disabilities to achieve the goals of
independence, productivity, and integration into the community,
including persons with developmental disabilities attzibutable
to physical impairment, mental impairment, or a combination of
mental and physical impairments. ( Section 122 ( f) ( 1) )
) Requirement that each State Planning Council conduct a review
and analysis of the effectivness of, and consumer satisfaction
with, the functions performed by, and the services provided or
paid for from Federal and State funds by each of the State
agencies ( including agencies providing public assistance)
responsible for performing functions for, and providing
services to, all persons with developmental disabilities within
the State. This review and analysis shall be based upon a
statistically valid survey of a representative sample of
persons with developmental disabilities receiving services from
each such agency, and if appropriate, shall include their
families. ( Section 122( f)( 2))
8) Requirement that each State Planning Council convene public
forums, after the provision of public notice within the State
to present the findings of the review and analysis of
requirements 6 and 7 of this policy, issuance obtain comments
from all interested persons in the State regarding the unserved
and underserved populations of persons with developmental
disabilities which result from physical impairment, mental
impairment, or a combination of physical and mental impairments
and obtain comments on any proposed recommendations concerning
the removal of barr iers to services for persons with
developmental disabilities and to connect such services to
existing State agencies by recommending the designation of one
or mote State agencies, as appropriate, to be responsible for
the provision and coordination of such services. ( Section
122 ( f) ( 3) 1
' 9) Requirement tkat t* Anma1 Repor: of the State Planning
Council include a desc:~ ption of the State Planning
council's response to significant actions taken by the
state w i t h respect to each annual survey report and plan
of corrections for cited deficiencies prepared pursuant
to Section 1902 ( a ) ( 31) ( 8 ) of the Soclal Security Act wit5
res? ect to any intermediate care facility for the
mencaily retarded in such Stace. ( Section 107( a) ( 4)).
* 131 Requirement that the Annual Report of the State Planninq
C o u r i c i l include a description of t h e progress made in t5e
Stace in, and any identifiaole trends concerning, the
sett, inq of priorities Lor, policy reform concerning, and
advc zacy for, per sons vi th developmental disabilities
whic? are attributable to physical impairment, mental
inpairment, or a combination of physical and mental
impairments, including any subpopulation of persons with
developmental disabilities ( including minorities) that
the State Planning Council may identify under sections
122 ( 3) ( 3) and 122 ( € 1 . ( Section 107 ( a) ( 5 ) .
11) Requirement that the State Planning Council include a
repzesentative of the State agency that administers funds
undo.: t5o Older Americans Act of 1965. ( Section
l 2 4 (!> I ( 3 ) )
Requlr emen t that the State Planning Council have the
author ity to prepare and approve a budget using amounts
paid to the State under the Basic State Grant :? cogram to
E i r e such staff and obtain the services of such
professional, technical, and clerical personnel
consistent with State law as the S t a t e Planning Cctuncii
dztermines to be necessary to carry out its functions.
( Section 124 ( c) ( 1) )
1 3 ) Requirement that the staff and other personnel of a State
Planning Council while working for the State Planning
Council, shall be responsible solely for assisting the
S t a t e Planning Council in carrying out its duties, and
shall not be assigned duties by the designated State
agency or any other agency or office of the State.
( Section 124( c) ( 2))
* while these reporting requirements become effective with the
FY 1988 annual ce? ort due Decembez 31, 1988, the activities to
be reported on must be conducted during FY 1988.
1f the required documentation is not received by March 15,
1988, the State will be subject to disallowance of expenditures
of Fiscal Year 1988 funds expended during the first two
quarters.
A Regional office listing is attached for your information,
ATTACHMENTS : List of HDS Regional Offices for the
Developmental Disabilities Program.
EFFECTIVE DATE: Date of Issuance
INQUIRIES TO: Regional Administrators, OBDS, Regions 111, VI
VII, IX.
Commissioner
Administration on Developmental
Disabilities

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DOUGLAS R. NORTON. CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
LINDA J. BLESSING, CPA
DEPLJiY AUDITOR GENERAL
February 3, 1988
Members of the Arizona Legislature
The Honorable Evan M echam, Governor
Mr. Randall L. Gray, Chairperson
Governor's Council on Developmental Disabilities
Transmitted herewith is a report of the Auditor General, a Performance Audit
of the Governor's Council on Developmental Disabilities. This report is in
response to a March 3, 1987, resolution of the Joint Legislative Oversight
Committee.
The report addresses the Council's performance in planning and advocating
services for Arizona's developmentally disabled citizens. The Council has
successfully identified the needs of developmentally disabled Arizonans and
developed a series of State plans to address these needs, but has had difficulty
implementing some aspects of its plans. The Council also needs to improve its
process for procuring contractors to implement projects so that the process is
consistent with the State procurement code.
My staff and I will be pleased to discuss or clarify items in the report.
Respectfully submitted,
~ o& g! as R. Norton
Auditor General
CC: Mr. Jon C. Hinz, Executive Director
Members of the Governor's Council
on Developmental Disabilities
Staff: William Thomson
Mark Fleming
Cindy Whitaker
Michael Friedman
2700 NORTH CENTRAL AVE. 8 SUITE 700 8 PHOENIX, ARIZONA 85004 8 ( 602) 255- 4385
SUMMARY
The Office of the Auditor General has conducted a performance audit of the
Governor's Council on Developmental Disabilities ( GCDD) in response to a March 3,
1987, resolution of the Joint Legislative Oversight Committee. This performance
audit was conducted as part of the Sunset Review set forth i n Arizona Revised
Statutes 5541 - 2351 through 41 - 2379.
The purpose of the GCDD is to plan and advocate on behalf of the State's
developmentally disabled citizens to assist them in reaching their maximum
potential. The Council does this by monitoring current services, identifying unmet
needs and gaps in services, and developing plans to address these needs. In addition,
the Council funds various projects based on identified needs.
GCDD Needs To Be More Effective
In Implementing Its State Plan ( see pages 11 through 15)
The Council has successfully identified the needs of Arizona's developmentally
disabled and developed a series of State Plans to address these needs. Furthermore,
the Council has successfully carried out some important projects. For example, one
recent project increased the number of developmentally disabled adults finding jobs
from four to 92. In addition, Council legislative advocacy efforts have resulted in
important contributions to the State's developmentally disabled population.
Despite its successes, the Council has had difficulty implementing some aspects of
its State Plans. The GCDD has identified transportation as an important issue for
the developmentally disabled since at least 1981, yet has sponsored only one minor
transportation related project in recent years. In addition, the Council has been
unable to hold an important workshop suggested by a Council task force nearly two
years ago. The Council has also poorly managed two significant projects addressing
other needs. One project funded a model program, the results of which were to
support a future funding request for treating the developmentally disabled/ mentally
ill. The Council spent approximately $ 250,000 over a two year period for this
project. However, the Council received the project's results 19 months behind
schedule and has indicated the quality of the final report is inadequate evidence of
the program's results. A second poorly managed project involved the six district
advisory councils. Although G C D D spends approximately half of its project dollars
to fund district councils each year, it has failed to regularly monitor district
councils' contract compliance.
To improve implementation of its State Plan, the GCDD should review its progress
in achieving stated goals and determine necessary actions to improve performance
or revise goals. Additionally, the Council should routinely monitor contractor
activity and take steps to resolve identified problems in a timely manner.
The GCDD Needs To Improve
Project Procurement ( see pages 17 through 20)
The Council needs to improve project procurement in two ways. First, the GCDD
should begin the contracting process earlier to ensure that funds are used in a timely
manner. During fiscal year 1987, slow Council action to identify and fund projects
resulted in over $ 92,200 of project funds remaining unused for most of the year.
Furthermore, the Council reverted approximately $ 37,400 of this amount during a
last minute attempt to obligate some of the remaining funds.
Secondly, the Council should strengthen its procurement procedures to improve
competition and ensure compliance with the State's Procurement Code. In the past,
the Council's method of soliciting and funding projects may have limited
competition. Current G C D D procurement guidelines are vague and limit the
Council's ability to effectively solicit innovative projects. According to
Department of Administration Purchasing and Department of Economic Security
contracting officials, the Council has two alternatives that would meet its project
identification and procurement needs and comply with Code provisions. The G C D D
should ensure that all future actions are consistent with the Procurement Code.
TABLE OF CONTENTS
Page
INTRODUCTION AND BACKGROUND . . . . . . . . . . . . . . . . . . . 1
SUNSETFACTORS . . . . . . . . . . . . . . . . . . . . . . . . . 7
FINDING I: THE GOVERNOR'S COUNCIL ON DEVELOPMENTAL
D I S A B I L I T I E S NEEDS TO BE MORE EFFECTIVE IN
IMPLEMENTING ITS STATE PLAN . . . . . . . . . . . . . . . 11
GCDD Has A c c o m p l i s h e d Some
I m p o r t a n t G o a l s . . . . . . . . . . . . . . . . . . . . . 11
I m p l e m e n t a t i o n I n Some Areas . . . . . . . . . . . . . . . 12
Has Been Weak
Recommendations . . . . . . . . . . . . . . . . . . . . . 15
FINDING I I : THE GOVERNOR'S COUNCIL ON DEVELOPMENTAL
D I S A B I L I T I E S NEEDS TO IMPROVE PROJECT PROCUREMENT. . . . . 17
C o u n c i l P r o c u r e m e n t P r a c t i c e s Are Slow . . . . . . . . . . 17
GCDD Needs To Ensure G r e a t e r C o m p e t i t i o n For
P r o j e c t P r o c u r e m e n t . . . . . . . . . . . . . . . . . . . 19
Recommendations . . . . . . . . . . . . . . . . . . . . . 20
AGENCY RESPONSE . . . . . . . . . . . . . . . . . . . . . . . . . 21
Page
LIST OF TABLES
TABLE 1 GOVERNOR'S COUNCIL ON DEVELOPMENTAL
D I S A B I L I T I E S EXPENDITURE DETAIL FEDERAL
FISCAL YEARS 1985- 86 THROUGH 1987- 88 . . . . . . . . 4
INTRODUCTION AND BACKGROUND
The Office of the Auditor General has conducted a performance audit of the
Governor's Council on Developmental Disabilities ( GCDD) in response to a March 3,
1987, resolution of the Joint Legislative Oversight Committee. This performance
audit was conducted as part of the Sunset Review set forth in Arizona Revised
Statutes ( A. R. S.) 9941- 2351 through 41 - 2379.
Role O f The Council
The Council is comprised of up to 23 members appointed by the Governor. By law,
the members must represent persons with developmental disabilities, parents and
guardians of persons with developmental disabilities, and representatives from State
agencies delivering services to the developmentally disabled. The Council was
established in 1978 under executive order as the Arizona Developmental Disabilities
Planning and Advocacy Council, and statutorily established in 1983 as the Governor's
Council on Developmental Disabilities. Federal law requires that Arizona create
such a Council in order to receive Federal funding under the Developmental
Disabilities Act of 1984.
The purpose of the Council is to coordinate, plan and monitor services for
developmentally disabled individuals. In addition, the Council advocates for these
individuals to assist them in reaching their maximum potential. The Council does this
by identifying unmet needs and gaps in service that face the developmentally disabled
population. To address these needs, the GCDD is required by statute to develop and
submit for approval an annual State Plan to the Federal Department of Health and
Human Services.
Extent Of Developmental Disability In Arizona
According to the Council's three year' 1987- 89 State Plan, it was estimated there
were more than 60,000 people in 1987 with developmental disabilities in Arizona.
Generally, persons unable to function in certain life areas identified in statute are
considered developmentally disabled. Specifically, the Council's statute defines
developmental disability as a severe, chronic disability of a person that:
a is attributable to mental or physical impairment such as mental retardation,
cerebral palsy, epilepsy or autism.
a is manifested before age 18.
0 is likely to continue indefinitely.
a results in substantial functional limitations in three or more of the following
l i f e areas: self- care, receptive and expressive language, learning, mobility,
self- direction, capacity for independent living, and economic self- sufficiency.
a reflects the need for a combination and sequence of special services which are
of lifelong or extended duration.
Not a l l developmentally disabled individuals receive services or treatment through
private and public agencies. According to a Department of Economic Security ( DES)
official, resources are directed generally towards infants and individuals with the
most severe functional limitations. For example, DES was funding services for
approximately 5,200 developmentally disabied persons as of June 30, 1987.
0 rganization
The Council is organized into four standing committees. The Executive committee
oversees the budget and allocates project funds. The Planning Committee
coordinates Council e f f o r t s w i t h other State agencies and evaluates the feasibility of
proposed projects. The Human Rights and Systems Committee addresses statewide
issues to improve service delivery and ensure the protection of the legal and human
rights of developmentally disabled persons. Activities of the Legislative Committee
include proposing, reviewing and monitoring legislative issues affecting
developmentally disabled people.
Currently, there are 22 Council members. In addition, five full- time staff support
Council activities. Staff include an executive director, planner, program and project
specialist, administrative secretary, - and clerk typist. In addition, the GCDD
periodically employs a part- time intern.
Federal law requires the Council be placed under the auspices of an administering
agency to assist the Council and its staff with administrative functions.
The Council's administering agency is the Department of Economic Security. In this
capacity, DES provides the Council with administrative services such as accounting,
contracting, and personnel services. For these services, DES may receive up to 5
percent of the Council's total yearly allotment or $ 50,000, whichever is less.
Budget
The GCDD is entirely Federally funded under the Developmental Disability Act of
1984. Although the Council receives no State funding, other State agencies co- fund
some Council projects. Federal statute specifies certain G C D D expenditure
allocations. At least 65 percent of Council funds are to be allocated to develop and
fund projects, while no more than 35 percent can go toward administrative and
planning activities. The Council operates on a Federal fiscal year ( October 1 through
September 30). Table 1 ( see page 4) shows Council expenditure detail for fiscal years
1985- 86 through 1987- 88.
Audit Scope And Purpose
Our audit of the GCDD focused on the Council's effectiveness in developing and
implementing the State Plan and the adequacy of the contracting process. The audit
concentrated on the Council's success in attaining several important State Plan
goals. In addition, our audit included a review of the Council's contracting process
used to meet its State Plan goals. The audit report presents findings and
recommendations in two areas.
( I The adequacy of the GCDD's execution of the State Plan.
0 The adequacy of the G CDD's contracting process.
We also present information addressing the 12 factors that the Legislature should
consider in determining whether the Governor's Council on Developmental
Disabilities should be continued or terminated.
TABLE 1
GOVERNOR'S COUNCIL
ON DEVELOPMENTAL DISABILITIES
EXPENDITURE DETAIL
FEDERAL FISCAL YEARS 1985- 86 THROUGH 1987- 88
( Unaud i ted)
Personal Services
Employee Related
Professional and
Outside Services
Travel
Equ i pmen t
DES - A d m i n i s t r a t i o n
Other Operating
Actual Actual Budgeted
FY 1985- 86 FY 1986- 87 FY 1987- 88
TOTAL
( a) DES reduced the amount of i t s a d m i n i s t r a t i v e charge f o r f i s c a l year 1986 because of
Council overexpenditures i n some budget categories.
( b) Although p r o j e c t s expenditures does not equal a t l e a s t 65 percent of y e a r l y
expenditures, some s t a f f costs are a l l o c a t e d t o p r o j e c t s . These include s t a f f costs
f o r c o n t r a c t and p r o j e c t development.
( c ) The t o t a l authorized amount of Federal funds was $ 624,189, however, $ 37,412 of p r o j e c t
funds was reverted t o the Federal government.
Source: Prepared by Auditor General s t a f f based on f i s c a l years 1985- 86
through 1987- 88 expenditure information provided by DES.
This audit was performed in accordance with generally accepted governmental
auditing standards.
The Auditor General and staff express appreciation to the Chairman, council
members, Executive Director and s t a f f o f the Governor's Council on Developmental
Disabilities for their cooperation and assistance during the audit.
SUNSET FACTORS
In accordance with Arizona Revised Statutes ( A . R. S.) 341- 2354, the Legislature
should consider the following 12 factors in determining whether the Governor's
Council on Developmental Disabilities ( GCDD) should be continued or terminated.
1. The objective and purpose in establish- i ng the Governor's Council - o. n
Developmental Disabilities
GCDD is Arizona's advocacy and planning body for persons with developmental
disabilities. GCDD's statute states that the purpose of the Council is " to
ensure that persons with developmental disabilities receive the care necessary
for them to reach their maximum potential." The Council meets this
responsibility in the following ways.
0 Identifying unmet needs for the provision of services for the
developmentally disabled through public input.
0 Developing a State Plan that establishes and prioritizes goals for addressing
those issues or problems.
0 Funding projects to meet those goals.
In addition, A. R. S. 341- 2454 directs the Council to serve as a statewide forum
for issues concerning the developmentally disabled, advise private and public
officials on current programs and policies, review service plans of agencies,
monitor services to the developmentally disabled population, and facilitate a
statewide community information network among the six district advisory
councils.
2. The effectiveness with which the GCDD has met its objective and purpose and
the efficiency with which it has operated
The Council has been generally effective in meeting some of its primary
responsibilities. GCDD has developed State Plans as required by law. In
addition, some GCDD members and staff and other parties indicated that the
Council's legislative advocacy work has produced some significant results in
addressing the needs of developmentally disabled children and adults.
Furthermore, some Council projects appear to have been successful. For
instance, projects assisting developmentally disabled adults in finding
employment and supporting siblings of developmentally disabled children have
demonst rated achievements.
However, the Council can increase its effectiveness in two ways. First, i t
needs to strengthen the implementation of the State Plan by reviewing progress
toward accomplishing goals and more carefully managing individual projects
( see Finding I, Page 11). Second, the Council needs to improve its procurement
process to ensure that it is able to contract for projects in a timely manner ( see
Finding II, page 17).
3. The extent to which the GCDD has operated within the public interest
The Council has operated within the public interest by:
m incorporating public input in developing a State Plan.
m funding projects to address unmet needs of developmentally disabled
individuals.
m showing significant involvement in legislative advocacy.
4. The extent to which rules and regulations promulgated by the GCDD are
consistent with the legislative mandate
According to the Attorney General's Office, the GCDD does not have the
authority to promulgate rules and regulations.
5. The extent to which the G C D D has encouraged input from the public before
promulgating its rules and regulations and the extent to which it has informed
the public as to its actions and their expected impact on the public
Since the GCDD does not have the authority to promulgate rules and
regulations, this factor does not apply.
6. The extent to which the GC DD has been able to investigate and resolve
complaints that are within its jurisdiction
The G C D D's enabling legislation does not establish a formal complaint review
process.
7. The extent to which the Attorney General or any other applicable agency of
State government has the authority to prosecute actions under its enabling
legislation
The G CDD's enabling legislation does not establish such authority.
8. The extent to which the GCDD has addressed deficiencies in its enabling
statutes which prevent it from fulfilling its statutory mandate
The Council's Federal mandate defines developmental disability more broadly
than its State statute. The Council was originally established by an Executive
Order which specified developmental disabilities to include autism, cerebral
palsy, epilepsy and mental retardation. However, when the Council helped
draft i t s enabling statute, SB 1139, its efforts resulted in a revised, broader
definition of developmental disabilities. According to the Council, this allowed
i t to advocate for individuals more in line with the Federal definition.
In 1986, the Council requested introduction of SB 1086 which increased Council
membership from 17 to no more than 23 in order to comply with changes in
Federal law requiring additional agency representation.
9. The extent to which changes are necessary in the laws of the GCDD to
adequately comply with the factors listed in the sunset law
Based on our audit work, no statutory changes are recommended.
10. The extent to which the termination of the GCDD would significantly harm
the public health, safety or welfare
Termination of the GCDD would not significantly harm the health, safety or
welfare of the State's developmentally disabled population. However, if the
G C D D were terminated, Arizona's developmentally disabled citizens would lose
a valuable resource. Although the GCDD does not provide continuous
direct- care services for the developmentally disabled, i t does serve as a
statewide advocate and funds projects to identify and meet the needs of the
developmentally disabled community. In addition, Arizona must have a Council
to receive its allotted share of Federal funds which will, according to Council
estimates, amount to approximately $ 650,000 for fiscal year 1988.
11. The extent to which the level of regulation exercised by the GCDD is
appropriate and whether less or more stringent levels of regulation would be
appropriate
The G C D D is not a regulatory agency, therefore, this factor does not apply.
12. The extent to which the GCDD has used private contractors in the
performance of i t s duties and how the effective use of private contractors
could be accomplished
The Council routinely hires private contractors. The Council has funded
annually, since at least fiscal year 1984, the six nonprofit district advisory
councils. In addition, the Center for Law in the Public Interest for the same
period received funding to provide increased public information and legal
advocacy services to the developmentally disabled. Periodically, the Council
also funds other private contractors for a variety of services. However, the
Council has experienced some contract management problems. To improve the
effective use of contractors, the Council should more closely monitor
contractor performance and assert authority when necessary, ( see Finding 1,
page 11).
FINDING I
THE GOVERNOR'S COUNCIL ON DEVELOPMENTAL DISABILITIES
NEEDS TO BE MORE EFFECTIVE IN IMPLEMENTING ITS STATE PLAN
The Governor's Council on Developmental Disabilities ( GC D D) could improve its
ability to implement its State Plan for meeting the needs of Arizona's
developmentally disabled citizens. The Council has successfully developed a State
Plan that meets Federal requirements and carried out some successful projects.
However, the State Plan's implementation has been weak in some areas.
GCDD Has Accomplished
Some Important Goals
GCDD has met several of its responsibilities. The Council has developed plans that
assist in meeting the needs of the developmentally disabled. Some projects appear
successful in accomplishing established goals.
State Plan - GCDD has developed a series of State Plans that identify issues
facing Arizona's developmentally disabled citizens. The Council has prepared
several three year State Plans since 1981. The three year State Plan can be
updated to allow for flexibility to meet changing needs or issues. Each Plan has
been approved by the U. S. Department of Health and Human Services.
Presently, the Council is implementing its 1987- 89 State Plan. The present State
Plan addresses a wide array of issues for improving services to developmentally
disabled people. These issues include transportation, housing, employment,
deinstitutionalization and parental rights.
State Plan issues are addressed through the identification, prioritization and funding
of projects for the developmentally disabled. The Council identifies State Plan
issues by holding public hearings, working with agencies serving the developmentally
disabled, and soliciting input from advocacy groups concerned with the needs of the
developmentally disabled. The Council has spent approximately $ 1.3 million dollars
since fiscal year 1983- 84 on projects for the developmentally disabled in Arizona.
Successful projects - The Council has carried out some important projects
designed to improve services for the developmentally disabled. For example, the
GCDD helped the Department of Economic Security fund a project to train and find
employment for severely disabled adults who were considered unemployable. This
project increased the number of developmentally disabled adults finding jobs from
four to 92, and the approach used in this project has been used in similar projects
throughout Arizona. The Council also funded a program to provide support for the
sisters and brothers of developmentally disabled children. The initial program
results were positive, prompting the Council to fund the expansion of the program in
1988.
In addition to funding projects, the Council has supported legislation affecting the
developmentally disabled. Several individuals interviewed during the audit cited the
Council's legislative advocacy as making important contributions to the
developmentally disabled population. The Legislative Consortium, chaired by a
G C D D representative, successfully supported legislation on preschool funding for
developmentally disabled children and parking for the handicapped. The consortium
also issued legislative alerts through the Council during the legislative session to
inform interested parties about issues that affect the developmentally disabled
community coming before the legislature.
Implementation in Some Areas
Has Been Weak
In contrast to its accomplishments, the Council has had difficulty implementing
some aspects of its State Plan. Little substantive action has been taken in the
trailsportation area, despite its importance. In addition, the Council has not
properly managed several major projects.
Limited action on transportation - Although transportation for developmentally
disabled individuals has been recognized as an important issue for several years,
GCDD has taken l i t t l e action to address the issue. According to the Council's own
analysis, transportation is important to developmentally disabled individuals
because it provides access to medical, educational and other services. The G CDD
identified several transportation barriers from a 1981 study while a 1982 series of
workshops provided many action recommendations for addressing transportation
problems.
The Council elected to study the issue again and convened a Transportation Task
Force in January 1985. The final task force report, issued in March 1986,
recommended the Council hold a workshop with service providers, service users and
legislators. However, the Council changed the site and date of the workshop several
times. The workshop is now scheduled for April 1988.
The lack of substantive action on transportation for the developmentally disabled
illustrates the Council's indecisiveness in dealing with a recognized problem.
Transportation has been recognized as an important issue since at least 1981, yet
few resources have been allocated to it. Since fiscal year 1984, the GCDD has
funded one transportation project at a cost of $ 3,000. This amount represents about
1 percent of annual project funds. Thus, GCDD has accomplished l i t t l e on a major
problem facing Arizona's developmentally disabled citizens. ( 1 )
Poor project management - Two projects representing significant Council action
and substantial funding have been poorly managed. GCDD's project to gain
designated funding for treatment of developmentally disabledlmentally ill
individuals was extremely late and did not meet the Council's expectations. In
addition, GCDD did not regularly review the activities of district advisory councils
( D A C) to ensure their contract compliance.
The Council failed to conclude an important project for treating a special population
of developmentally disabled people. Although the G C D D spent nearly $ 250,000 on
this project, it did not obtain expected results. The results from this project were
to be used to support an agency's request for designated funding for treating people
who are developmentally disabled with mental health problems.
This project blended the staff and financial resources of the GCDD with the
Department of Economic Security ( DES) Division of Developmental Disabilities and
the Department of Health Services. The project was designed to provide
therapeutic residential and day programs for up to 18 developmentally disabled
persons with mental health problems. ( 2)
( 1 ) Some a c t i o n has been taken on t r a n s p o r t a t i o n by the l o c a l d i s t r i c t advisory
councils. Two d i s t r i c t c o u n c i l s reported a c t i v i t i e s on t r a n s p o r t a t i o n issues i n
t h e i r 1987 annual reports to the GCDD.
( 2) The developmental 1 y d i s a b l e d person w i t h mental i l l n e s s has t r a d i t i o n a l l y been an
i n d i v i d u a l whose needs were not addressed because of the u n c e r t a i n t y about whether
the person i s p r i m a r i 1 y developmental 1 y d i s a b l e d or mental1 y ill .
GCDD experienced problems throughout the project. The Council was not a
signatory to the initial project contract and, therefore, lacked control over its
payments to the contractor. (" After recognizing this oversight, the Council
obtained signatory authority. The Council identified problems shortly after the
project began but was unable to correct them. For instance, inconsistencies in
vendor claims and attendance records noted at the project's outset remained as it
was completed. During one program site review, the Council had concerns about the
welfare of one client but did not report the concern to DES or demand an immediate
response from the contractor. Furthermore, the final report on client success rates
was 19 months late. Some council members and staff stated that the training
materials and final report are inadequate. As a result, this project has not been
used for its intended purpose.
The Council did not appear to know how to manage the contract to gain
compliance. Although the Council had concerns about the contractor's performance
at several points throughout the contract period, i t was unable to specifically
identify its expectations to the contractor. In addition, the GCDD did not attempt
to use a common technique of withholding payments to ensure compliance. Thus,
the GCDD did not exercise accepted contact management techniques to ensure that
the project's intended purpose was accomplished. Recently, the GCDD executive
director met with the contractor in an attempt to obtain the desired output.
GCDD has also failed to adequately monitor the performance of the six district
advisory councils. Over the past three years, the GCDD has allocated
approximately half of its project funds for the DACs. This amounted to $ 174,000
during fiscal year 1986- 87. These district councils assist the GCDD by providing
local input and information on issues affecting the developmentally disabled.
Despite their importance, prior to August 1986 the GCDD had not conducted regular
DAC site reviews for several years. In addition, site reviews conducted by the
Council between August 1986 and April 1987 found problem areas in the DAC's
delivery of contracted services. Some examples of these problems are an
unorganized legislative alert system, weak networking relationships, and no public
awareness meetings. The Council also identified documentation problems.
( ' 1 DES and the GCDD j o i n t l y funded t h i s p r o j e c t . The contract began b e f o r e t h e GCDD
signed t h e c o n t r a c t because DES had signed and i n i t i a t e d the c o n t r a c t .
Furthermore, the Council did not adequately address the identified problems in new
DAC contracts. According to GCDD staff and meeting minutes, DAC contracts for
fiscal year 1987- 88 were to include DAC action plans for correcting deficiencies
noted during site reviews. However, our review found that this did not occur.
According to some D A Cs, the G C D D wrote unclear site review reports and was slow
in returning some reports. These problems may have delayed the DACs returning
corrective action plans to the Council. The Council received only two DAC
corrective action plans prior to fiscal year- end. In addition, our review indicated
that Council staff did not adequately incorporate the corrective action plan
information into the fiscal year 1988 contracts. Consequently, similar D A C
performance problems may continue because contracts do not adequately reflect
promised corrective action.
RECOMMENDATIONS
1. The Council should review its progress in achieving the goals identified each
year in its State Plan. I f the review indicates limited or no progress, the
Council should: 1) determine what actions are necessary to improve
performance in attaining the goal and act upon what was determined, or 2)
revise the State Plan to change the goal.
2. The Council should improve project management by: 1) routinely monitoring
contractor activity to ensure that i t complies with the contract, and 2) bringing
problems identified during the review to the attention of the contractors and
resolving them in a timely manner. In cases where problems are not resolved to
the Council's satisfaction, it should take necessary steps, including withholding
payments, until problems are resolved.
FINDING II
THE GOVERNOR'S COUNCIL ON DEVELOPMENTAL DISABILITIES
NEEDS TO IMPROVE PROJECT PROCUREMENT
The current procurement practices of the Governor's Council on Developmental
Disabilities ( GCDD) may not ensure the most productive use of project funds. Late
project identification and contracting may reduce the Council's capability to meet
its goals. Furthermore, weak procurement practices may compromise fair and open
competition.
Each year, the Council contracts ( under the auspices of the Department of
Economic Security) with individuals, organizations and State agencies for specific
projects or activities to identify and f u l f i l l needs of the developmentally disabled.
This process is a major role of the Council. Federal law mandates that the GCDD
spend the majority of its yearly appropriation on project development and
implementation. For fiscal years 1984 through 1987, the Council averaged 15
project related contracts and agreements each year, and spent approximately $ 1.3
million on projects during the four year period.
Council Procurement
Practices Are Slow
Late contracting and project identification may reduce the Council's effectiveness
in meeting its goals. During fiscal year 1987, approximately $ 92,200 of GCDD
project money remained unused for nearly the entire year. This ultimately resulted
in the reversion of $ 37,400 of the funds, and last minute expenditures of $ 11,450 on
numerous small projects and conferences. The GCDD should revise the project
procurement process to ensure that funds are used in a timely manner.
The GCDD was slow to identify and fund projects during fiscal year 1987. More
than $ 92,200 of 1987 project money, approximately 24 percent, was available but
remained unused by the GCDD for nearly the entire fiscal year ( ' I Excluding
projects the Council regularly funds each year, such as district advisory councils,
this amount accounted for nearly 57 percent of uncommitted project funds. ( 2)
) The GCDD operates on the Federal f i s c a l year - October 1 t o September 30.
( * ) A1 though considerable l a t e p r o j e c t i d e n t i f i c a t i o n and funding occurred during f i s c a l
year 1987, it also occurred during 1986 t o a l e s s e r extent.
Council and Department of Economic Security records show that although
approximately $ 54,800 of the $ 92,200 was eventually used, because the Council was
late to act it lost approximately $ 37,400 of fiscal year 1987 funds. According to a
Federal officia!, state councils must formally obligate project money within the
year i t is appropriated by the Federal government. Unobligated funds are reverted,
or returned, to the Federal government. On September 29, 1987, Council staff
submitted an agreement to be signed by DES regarding a joint GCDDIDES project.
The Council's intention was that remaining project money would be obligated by this
signed agreement. However, DES did not sign the document, questioning the need
for such an agreement. Consequently, because the Council waited until virtually the
last day of the fiscal year to obligate remaining project funds, there was no time to
resolve the problem and, therefore, the money reverted.
Furthermore, the Council's attempts to identify and fund projects near the end of
the year may result in less effective use of the Council's limited resources. For
example, the GCDD spent $ 11,450 on eight small dollar projects and conferences
during the last month of the fiscal year. Although each concerned the
developmentally disabled and some were considered by the Council for several
months, funding numerous small projects may not be the most effective use of the
Council's limited funds. Some Council members themselves have indicated
displeasure over this type of spending.
The Council should revise its project procurement process to ensure that funds are
used in a timely manner. The Council should begin planning and procuring for
projects much earlier than in recent years, so project contracts can be started as
early as possible, preferably within the first few months of the fiscal year.
Approximately six months prior to each fiscal year, the Federal government
provides an estimate of the revenue the GCDD can expect to receive during the
following fiscal year. Actual revenue has exceeded the estimate in recent years.
Thus, the Council could use this information to budget and start developing
contracts before the new year starts.
GCDD Needs To Ensure Greater Competition For
Project Procurement
The Council's past practice of soliciting and funding concept papers may not have
fully complied with Arizona's procurement requirements. Although the
Procurement Code is designed to maximize competition, some Council procedures
may unnecessarily limit competition. The GCDD could meet its needs for
innovative projects by complying with the Code.
The Arizona Procurement Code ( Arizona Revised Statutes $ 341- 2501 through 2652)
is designed to provide for fair and open competition. The Code establishes
purchasing methods and procedures designed to foster maximum feasible
competition.
Soliciting and funding concept papers, a method used by the Council through 1986 to
identify innovative projects, may limit competition in two ways. First, soliciting
concept papers through local district advisory council ( DAC) newsletters and by
word- of- mouth, for example, may be construed as a request for proposals ( RFP).
This process may not meet Procurement Code public notice requirements, which
generally require advertising the RFP at least twice in a general circulation
newspaper with at least 65,000 subscribers. Secondly, the Council has, on occasion,
issued an RFP based on a concept paper. This process can also limit competition
because there may be a tendency to develop an RFP so specific to the original
concept that only the submitter of the concept could adequately respond.
Although the Council no longer solicits concept papers, current procedures are
vague and could be strengthened to allow the Council to continue to identify
innovative projects while complying with Procurement Code requirements for public
advertising. The Code provides several options. One method is the RFP process in
which initial proposals and " best and final offers" are solicited; the other is a
two- step RFP method. According to a DES Contracts Management Section manager
and the State Purchasing Office, both methods could be used by the Council.
Under the first method, the Council would develop and advertise a general RFP, as
required by the Code, requesting technical offers ( similar to concept papers) and an
estimated total project cost. ( " The Council could also send an RFP to any
persons or organizations i t is aware of that may be interested in receiving an RFP,
such as the DACs. The Council would then review the proposals received and
identify those projects of greatest interest to the Council. Discussions could be held
with potentially acceptable proposers to clarify G C D D intent and further define the
potential project and costs involved. For those deemed potentially acceptable, the
Council would solicit and evaluate " best and final offerstt containing more project
detail and specific budget information.
The second method, a two- step R FP process, also allows for flexibility in identifying
creative projects. Under this method, the G C D D could request interested parties to
submit project ideas, through a variety of means, such as DAC newsletters.
However, the request must clearly indicate that: 1) it is not a request for proposals,
and 2) respondents may be placed on bidders lists to be used when the GCDD issues
future RFPs. The Council would evaluate project ideas received and develop two
bidders lists. The first list would consist of projects the Council is most interested
in, the second would contain projects of lesser interest to the Council. The Council
would then develop and advertise a general RFP. The RFP would be sent to any
party requesting it, based on the advertisement, and also to all persons or
organizations on the first bidders list. The Council would complete the process by
conducting discussions, and evaluating all proposals received.
RECOMMENDATIONS
1. The G C DD should develop procurement procedures to ensure that contracts are
negotiated so projects can start at the beginning of each fiscal year.
2. The Council should revise and follow policies and procedures to improve
competition by ensuring adherence with the Procurement Code for project
procurement. To assist in developing these guidelines and to ensure that G C D D
needs are met, Council staff should consult with representatives of the DES
Contracts Management Section and the State Purchasing Office.
( ' I A " general RFP" would contain d e s c r i p t i v e information about GCDD goals, o b j e c t i v e s
and broad areas of i n t e r e s t .
1 7 1 7 W JEFFERSON
SITE CODE 0742
P 0 BOX 6123
PVOENIX. ARIZONA 85005
16021 255.4049
Governor's Council
on
Developmental Disabilities
EVAN MECHAM
Governor
RANDALL L. GRAY
Chairperson
JON C. HlNZ
Executive Director
January 28, 1988
Mr. Douglas R. Norton
Auditor General
State of Arizona
2700 N. Central Ave.
Suite 700
Phoenix, AZ 85004
Dear Mr. Norton:
The Governor's Council on Developmental Disabilities ( GCDD)
has reviewed the draft report of the performance audit and
appreciates the opportunity to add clarification to several
points raised in the audit.
FINDING I: THE GOVERNOR'S COUNCIL ON DEVELOPMENTAL
- D ISABILITIES NEEDS TO BE MORE EFFECTIVE IN IMPLEMENTING ITS
STATE PLAN
Transportatio- n
The proposed workshop to address rural transportation
problems has been scheduled, with a date, site and federal
participation committed. It should be also noted that
individually the District Advisory Councils ( DACs), funded
by the GCDD, have addressed this issue with measures of
success based on the needs of people with disabilities in
their respective areas. The broad geographics of Arizona
have made it extremely difficult to resolve transportation
problems as a single state issue. The GCDD will encourage
the DACs to address problems of transportation on a district
by district basis. The Council will also support other
agencies better equipped to handle transportation on a local
basis.
- P- roject management
The Joint Project with GCDD,- DES- DDD and DHS to fund a model
program for persons with a dual diagnosis presented many
difficulties for the GCDD. Documents show a clear
reluctance by the GCDD to take steps to withhold funds as
A Member of the National Association of Developmental Disabilities Councils
" An Equal Opportunity Agency"
Page 2
recommended by the Auditor General. The Council is not
clear it had that option in a cooperative contract with the
Administering Agency. Clarification is being sought for
future contracts. The GCDD is also continuing to work with
the contracted provider to secure the referenced materials
in a more usable form.
As stated by the audit team, th9 Council had taken steps to
improve monitoring of the six DACs prior to the beginning of
the audit. A yearly program of on- site reviews has been
implemented. The format is still under review and the audit
team recommendations will be incorporated into the
monitoring process.
FINDING 11: THE GOVERNOR'S COUNCIL ON DEVELOPMENTAL
DISABILITIES NEEDS TO IMPROVE PROJECT PROCUREMENT
The GCDD has taken steps to identify funding priorities much
earlier in the planning cycle. Funding priorities for FY- 88
were established at the September Planning Retreat and two
KFP's were prepared by November, 1987.
As to the reversion of $ 37,400, while the GCDD did not
submit the final agreement to DES until September 29, 1987,
this was a joint project with DES- DDD and discussions were
held several months prior allowing for a timely obligation
of the funds. The GCDD notified DES the document needed to
be signed and had no reason to believe they would question
the need for such an agreement. GCDD has met with current
administration and steps have been taken to avoid future
difficulties. In addition, the Federal Government has
responded to this recognized national problem by allowing
two years to commit funds to projects instead of one as
referenced in the audit report. This is effective October
1, 1987.
The GCDD is appreciative of the audit team's efforts to aid
the Council in establishing procedures of procurement more
in line with GCDD objectives. Federal criteria mandates
" new and inovative programs" and at the same time the GCDD
must meet the requirements of the State Procurement Code.
The audit team's recommendations will be adopted.
SUMMAR- Y: The Governor's Council on Developmental
Disabilities was very pleased with the extra effort the
audit team put forth to understand the complexities of our
programs. Being entirely Federal funded, the Council must
respond to all Federal reporting and mandated program
requirements. In addition, the Council must adhere to all
Page 3
policies of its Administering Agency. Public Law 100- 146
Developmental Disabilities Act of 1987, effective October 1,
1987, addresses several of the items mentioned by the audit
team and a copy of ADD- PI- 88- 2, BSG- New Requirements is
attached to show required changes in our program that must
be made to meet established 1990 deadlines. Of special note
to the Legislature and Executive Office are:
Page 2, Item 1) This will require Executive action prior
to June 30, 1988 and possible Legislative action prior to
1990 determining the status of the GCDD relating to an
administering agency.
Page 6, Item 11) This provision may require a change in
the alloted number of members permitted to serve on the GCDD
from its current cap of 23. This may be necessary to retain
the provision of at least 50% representation of consumers on
the GCDD as required by Statute.
The balance of changes focus on the implementation of
programs to better assess the effectiveness of current
services as well as to provide input for better utilization
of resources to serve people with developmental
disabilities.
Arizona is recognized as a leader in implementing innovative
programs to persons with developmental disabilities, while
at the same time committing the least amount of resources to
develop those same programs. The GCDD has worked closely
with all agencies providing services, responding to consumer
input, and many of the innovative programs now in place
began as pilot projects worked on or funded by the GCDD.
Strong philosophical differences still exist as to the best
way to provide optimum opportunity to individuals with
developmental disabilities. No argument exists, however,
that they deserve every opportunity to achieve their maximum
potential and that all society benefits when they attain a
level of independence.
Members of the Governor's Council on Developmental
Disabilities again wish to thank the Auditor General's
Office for the help they provided in aiding the Council to
play a stronger role in seeking that goal.
A
Sincerely,
Randall L. Gray
Chairperson pxecutive Director
hds human
development
services
-
TO: Directors, State Administering Agencies
Directors, State Planning Councils
1 1 6.
SUBJECT : New Requirement3 for State Participation in
the Basic State Grant Program for Planninu
U. S. DEPARTMENT. OF HEALTH AND HUMAN SERVICES
Administration on Developmental Disabilities
r
7.
and Services for Persons with ~ e v e l o ~ m e n t a i
isa abilities - FY 1988 Instruction and RECEIVED
1. Log NO~ ADD- PI- 88- 2
PROGRAM INSTRUCTION
Allotments to States.
2. I S S U ~ D~ ateC: 1~/ 5 / 8 3
LEGAL AND
3. Originating Office: $ f m t g i f ~ ~ rito n on Developmental
sa L e s
4. Key w O f da: eBn~ ts~ - ~ eRweq uire 5. p S L . 100- 1& 6
1 *
RELATED Public Law 100- 146 Developmental Disabilities
REFERENCES: Act of 1987
45 CFR Part 1386, dated March 27, 1984.
CONTENT: Public Law 100- 146 was signed on October 29,
1987. Among the new requirements were provisions
that require immediate State attention.
This instruction provides guidance to States on
compliance with the additional requirements
imposed on States by Sections 107,122 and 124 of
the Act. This interim guidance is being provided
in order to minimize any disruption in the Basic
State Grant Program, and the requirements set
forth in this instruction are in addition to all
other requirements of Public Law 100- 146.
INSTRUCTION: States are advised that all requirements referred
to in this guidance are in effect as of October 1,
1987. No later than March 15, 1988, each State
must submit to the appropriate Regional Office
documentation that it will implement the
requirements listed below in this Fiscal Year ( FY
1988). Third and fourth quarter formula grant
awards will not be issued to any State which has
not submitted the documentation in the form of
amendments by March 15, 1988, to the currently
approved Three Year State Plan. The requirements
to be addressed rn these amendments are numbers
4 , 5 , 6 , 7 , and 11 of thrs issuance.
The remainder of t ? e requirenents must be
addressed tnrough elt!'! er amendaents to the Three
Year s t a t e Plan far Fiscal Year 1989, the new
three year State plan for Fiscal Years 1990
through 1992, Or ot! ier appropriate action by the
s t a t e a s noted i n t h i s program i n s t r u c t i o n .
~ d d i t i o n a lg uidance r e l a t i v e to these requirements
w i l l be issued by ADD in the future.
T?, ese new requirements are:
Governor
Requirement t h a t the Governor of the State determine before
Jane 30, 1988 i f he w i l l excerise h i s d i s c r e t i o n to r e t a l n
i n t3e State Plan, the designation of a State Agency that
provides or pays for services for persons w i t h
developmental d i s a b i l i t i e s as the designated State agency
to adminsster the Developmental D i s a b i l i t i e s Basic State
Grant Program. T h i s determination can be made by the
Governor of the State only a f t e r he has considered the
comments of the general public and the non- State agency
members of the State Planning Council w i t h respect to the
continued designation of suc5 agency, and a f t e r the
Governor has made an independent assessment of the impact
t h a t tke designation of such agency h a s on the a b i l i t y of
the State Planning Council to serve as an advocate for
persons w i t h developmental d i s a b i l i t i e s .
I f the Governor decides not to r e t a i n a service providing
agency as the S t a t e administering agency for the
developmental d i s a b i l i t i e s program, no action w i t h regard
t o a new designation is required u n t i l the Three Year State
plan for Fiscal Years 1990- 1993 is submitted to the
Administration on Developmental D i s a b i l i t i e s .
T3is State plan must then include the new designation of an
agency within t h e State which may be: the State Planning
Council, i f such Council may be designated a State agency
under t h e laws of the State: a State agency t h a t does not
provide or pay for services made available to persons w i t h
developmental d i s a b i l i t i e s : or a State o f f i c e , including
t3e immediate o f f i c e of the Governor of the State or a
S t a t e Planning Office. ( Sections 122 ( b) ( 1) ( B ) and
122 ( el ( 1)
State Planning Council and Governor
Requirement that by January 1, 1990, each State Planning
Council prepare and transmit to the Governor of each State
and the legislature of the State a final written report
concerning the reviews and analysis required under numbers
6 and 7 of this policy issuance. The Governor is required
to submit a copy of this report to the Secretary of the
Department of Health and Human Services no later than
January 15, 1990. This report must contain recommendations
by the State Planning Council concerning:
o the most appropriate agency or agencies of the State to
be designated as responsible for the provision and
coordination of services for persons with developmental
disabilities who are traditionally underserved, such as
persons with developmental disabilities attributable to
physical impairment, persons with developmental
disabilities attributable to dual mental impairments,
and persons with developmental disabilities attributable
to a combination of physical and mental impairments, and
such other subpopulations of persons with developmental
disabilities ( including minorities) as the State
Planning Council may identify: and
o the steps to be taken to include the data and
recommendations obtained through the conduct of the
reviews and analyses under requirements 6 and 7 of this
policy issuance in the State Planning Council's ongoing
advocacy, public policy, and model service demonstration
activities. ( Section 122 ( f) ( 4))
State Administering Agency and State Planning Council
3 ) Requirement that the State plan provide for the review and
revision, not less often than once evesy three years, of
the comprehensive Statewide plan to ensure the existence of
appropriate planning, financial support and coordination,
and to otherwise appropriately address, on a Statewide and
comprehensive basis, urgent needs in the State for the
provision. of services for persons with developmental
disabilities and the families of such persons. Such review
and revision, and examination of the provision and the need
for the provision in the State of the four Federal priority
areas and the State priority area shall take into account
the reviews and analysis conducted in accord with 6 and 7
in this policy issuance ahd the report required under 2 in
this policy issuance and include at a minimum:
( a ) an analysis of sac> priority arex in relatlon ~ 3
limited support or lack of support for persons wlt5
developmental disabilities attributable to either physical
inpaicment, mental im? alrment, Or a combination of physical
and nental impalrnents:
( b) an analysis of criteria for eligibility for services,
including specialized services and special adaptation of
generic services provided by agencies within the State,
t h a t nay be causing persons with developmental disablllties
to be excluded from recelvlng such services:
( c) an analysis of services, assistive technology, or
knowledge which may be unavailable to assist persons with
developmental disaailities:
an analysis of existing and projected fiscal resources :
( e) an analysis of any other issues identified by the State
Plannlng Council: and
( f) the formulation of objectives in both policy reform and
service demonstration to address the issues described in
clauses ( a) through ( e) for all subpopulations of persons
with developmental disabilities which may be identified by
the State Planning Council.
This requirement applies to the FY 1990- 1992 Three Year
State Plans. ( Section 122 ( b) ( 5 ) )
4 ) Zeq~ irement that the description in the State Plan of the
extent and scope of services provided or to be funded to
persons w i t h developmental disabilities under other State
plans or federally assisted State programs in which persons
with developmental disabilities are eligible to participate
include programs relating to job training, aging, programs
for children with special health care needs and housing,
comprehensive health and mental health and such other ,2lans
as the Secretary may specify. ( Section 122 ( b) ( 2)( c) ( ~) j
5 ) Requirement that, the State plan describe a process and
tinretable for the completion by January 1, 1990, by the
State Planning Council in the State, of the reviews,
a ~ ~ l y s e sa, nd final report described in requirements 6- 9
below. ( Section 122 ( b) ( 3) )
State Planning council
6 ) Requirement that each State Planning Council conduct a
comprehensive review and analysis of the eligibility ( of
persons with developmental disabilities) for services provided,
and the extent, scope, and efffectivness of the services
provided and the functions performed by, all State agencies
( including agencies which provide public asistance) which
affect, or which potentially affect the ability of persons with
developmental disabilities to achieve the goals of
independence, productivity, and integration into the community,
including persons with developmental disabilities attzibutable
to physical impairment, mental impairment, or a combination of
mental and physical impairments. ( Section 122 ( f) ( 1) )
) Requirement that each State Planning Council conduct a review
and analysis of the effectivness of, and consumer satisfaction
with, the functions performed by, and the services provided or
paid for from Federal and State funds by each of the State
agencies ( including agencies providing public assistance)
responsible for performing functions for, and providing
services to, all persons with developmental disabilities within
the State. This review and analysis shall be based upon a
statistically valid survey of a representative sample of
persons with developmental disabilities receiving services from
each such agency, and if appropriate, shall include their
families. ( Section 122( f)( 2))
8) Requirement that each State Planning Council convene public
forums, after the provision of public notice within the State
to present the findings of the review and analysis of
requirements 6 and 7 of this policy, issuance obtain comments
from all interested persons in the State regarding the unserved
and underserved populations of persons with developmental
disabilities which result from physical impairment, mental
impairment, or a combination of physical and mental impairments
and obtain comments on any proposed recommendations concerning
the removal of barr iers to services for persons with
developmental disabilities and to connect such services to
existing State agencies by recommending the designation of one
or mote State agencies, as appropriate, to be responsible for
the provision and coordination of such services. ( Section
122 ( f) ( 3) 1
' 9) Requirement tkat t* Anma1 Repor: of the State Planning
Council include a desc:~ ption of the State Planning
council's response to significant actions taken by the
state w i t h respect to each annual survey report and plan
of corrections for cited deficiencies prepared pursuant
to Section 1902 ( a ) ( 31) ( 8 ) of the Soclal Security Act wit5
res? ect to any intermediate care facility for the
mencaily retarded in such Stace. ( Section 107( a) ( 4)).
* 131 Requirement that the Annual Report of the State Planninq
C o u r i c i l include a description of t h e progress made in t5e
Stace in, and any identifiaole trends concerning, the
sett, inq of priorities Lor, policy reform concerning, and
advc zacy for, per sons vi th developmental disabilities
whic? are attributable to physical impairment, mental
inpairment, or a combination of physical and mental
impairments, including any subpopulation of persons with
developmental disabilities ( including minorities) that
the State Planning Council may identify under sections
122 ( 3) ( 3) and 122 ( € 1 . ( Section 107 ( a) ( 5 ) .
11) Requirement that the State Planning Council include a
repzesentative of the State agency that administers funds
undo.: t5o Older Americans Act of 1965. ( Section
l 2 4 (!> I ( 3 ) )
Requlr emen t that the State Planning Council have the
author ity to prepare and approve a budget using amounts
paid to the State under the Basic State Grant :? cogram to
E i r e such staff and obtain the services of such
professional, technical, and clerical personnel
consistent with State law as the S t a t e Planning Cctuncii
dztermines to be necessary to carry out its functions.
( Section 124 ( c) ( 1) )
1 3 ) Requirement that the staff and other personnel of a State
Planning Council while working for the State Planning
Council, shall be responsible solely for assisting the
S t a t e Planning Council in carrying out its duties, and
shall not be assigned duties by the designated State
agency or any other agency or office of the State.
( Section 124( c) ( 2))
* while these reporting requirements become effective with the
FY 1988 annual ce? ort due Decembez 31, 1988, the activities to
be reported on must be conducted during FY 1988.
1f the required documentation is not received by March 15,
1988, the State will be subject to disallowance of expenditures
of Fiscal Year 1988 funds expended during the first two
quarters.
A Regional office listing is attached for your information,
ATTACHMENTS : List of HDS Regional Offices for the
Developmental Disabilities Program.
EFFECTIVE DATE: Date of Issuance
INQUIRIES TO: Regional Administrators, OBDS, Regions 111, VI
VII, IX.
Commissioner
Administration on Developmental
Disabilities